Everyone in U.S. is entitled to a free copy of his/her credit report every year. Don't just file that Section 32 Reports as your annual routine. You should scan it to find out malicious entries which can harm your financial life. Here are some important tips for scanning.
Remember to request your credit report from all three credit bureaus. Do not presume that their reports will be same. There may be some entries not present in all three reports.
Your credit report is divided into four sections. You should check every section for errors.
1. The first section of the credit report contains your identification details. Details like your name, your social security number, you date of birth, your address - past and present, details about your driving license, details about your employer and name of your spouse will be entered here.
In this section you need to check the addresses in the first place. If you find an unknown address or a PO Box address which you are not aware of, it is a sign of identity theft. Someone might have opened a new credit account using your name and the bills are posted to the new address which you are not aware of. If you see such addresses in your credit report, you should immediately contact the credit bureau to request for a security freeze. You can then contact the creditor who has extended credit for this particular account and request for immediate suspension of that account.
You should also check your middle initial or maiden name appearing in the report. There is a possibility of a mix up with someone having similar name. There is also a possibility of someone with that name using your identity for obtaining credit. If you notice any such mistake you should contact the credit bureau requesting for cancellation of such entry from your credit report.
2. The second section of your report contains your credit history. Under this section, the name of every creditor who has extended credit to you and your account number with that creditor can be found. All other details including the date of opening your account, the nature of credit extended to you (like mortgage or revolving credit), the amount of loan or the highest balance on the credit card, the status of loan like active or inactive, and the total amount owed is entered. Even the slightest discrepancy in any of these details is a matter of concern to you and you should immediately take action to get it corrected.
In this section, you have to find out whether there are any accounts you are not aware of. If you find any, you should request the credit bureau for its removal. Check whether your old accounts are shown as closed. If they are not, you should request the creditor to make entry about closure. This is important as identity thieves might re-open that account without your knowledge. The type of accounts appearing on your report should also be verified word by word. Identity thieves may request addition of their name as authorized users on your account.